diff --git a/admin/create-theme/theme-templates.php b/admin/create-theme/theme-templates.php
index 437a12e2..668ff60c 100644
--- a/admin/create-theme/theme-templates.php
+++ b/admin/create-theme/theme-templates.php
@@ -131,10 +131,10 @@ public static function clear_user_templates_customizations() {
 	 * @param object $template The template to extract content from.
 	 * @return object The template with the patternized content.
 	 */
-	public static function paternize_template( $template ) {
+	public static function paternize_template( $template, $slug = null ) {
 		// If there is any PHP in the template then paternize
 		if ( str_contains( $template->content, '<?php' ) ) {
-			$pattern                 = Theme_Patterns::pattern_from_template( $template );
+			$pattern                 = Theme_Patterns::pattern_from_template( $template, $slug );
 			$pattern_link_attributes = array(
 				'slug' => $pattern['slug'],
 			);
@@ -173,12 +173,12 @@ public static function prepare_template_for_export( $template, $slug = null, $op
 			$template = Theme_Media::make_template_images_local( $template );
 		}
 
-		$template = self::paternize_template( $template );
-
 		if ( $slug ) {
 			$template = self::replace_template_namespace( $template, $slug );
 		}
 
+		$template = self::paternize_template( $template, $slug );
+
 		return $template;
 	}
 
diff --git a/admin/create-theme/theme-utils.php b/admin/create-theme/theme-utils.php
index 3ebec180..45be322d 100644
--- a/admin/create-theme/theme-utils.php
+++ b/admin/create-theme/theme-utils.php
@@ -30,12 +30,9 @@ public static function get_file_extension_from_url( $url ) {
 		return $extension;
 	}
 
-	public static function replace_namespace( $content, $new_slug, $new_name ) {
-		$theme               = wp_get_theme();
-		$old_slug            = $theme->get( 'TextDomain' );
+	public static function replace_namespace( $content, $old_slug, $new_slug, $old_name, $new_name ) {
 		$new_slug_underscore = str_replace( '-', '_', $new_slug );
 		$old_slug_underscore = str_replace( '-', '_', $old_slug );
-		$old_name            = $theme->get( 'Name' );
 
 		// Generate placeholders
 		$placeholder_slug            = md5( $old_slug );
@@ -57,6 +54,10 @@ public static function replace_namespace( $content, $new_slug, $new_name ) {
 
 	public static function clone_theme_to_folder( $location, $new_slug, $new_name ) {
 
+		$theme    = wp_get_theme();
+		$old_slug = $theme->get( 'TextDomain' );
+		$old_name = $theme->get( 'Name' );
+
 		// Get real path for our folder
 		$theme_path = get_stylesheet_directory();
 
@@ -97,7 +98,7 @@ public static function clone_theme_to_folder( $location, $new_slug, $new_name )
 			if ( preg_match( "/\.({$valid_extensions_regex})$/", $relative_path ) ) {
 				// Replace namespace values if provided
 				if ( $new_slug ) {
-					$contents = self::replace_namespace( $contents, $new_slug, $new_name );
+					$contents = self::replace_namespace( $contents, $old_slug, $new_slug, $old_name, $new_name );
 				}
 			}
 
diff --git a/admin/create-theme/theme-zip.php b/admin/create-theme/theme-zip.php
index 34087371..b7c39891 100644
--- a/admin/create-theme/theme-zip.php
+++ b/admin/create-theme/theme-zip.php
@@ -31,6 +31,10 @@ public static function add_theme_json_to_zip( $zip, $export_type ) {
 
 	public static function copy_theme_to_zip( $zip, $new_slug, $new_name ) {
 
+		$theme    = wp_get_theme();
+		$old_slug = $theme->get( 'TextDomain' );
+		$old_name = $theme->get( 'Name' );
+
 		// Get real path for our folder
 		$theme_path = get_stylesheet_directory();
 
@@ -72,7 +76,7 @@ public static function copy_theme_to_zip( $zip, $new_slug, $new_name ) {
 
 					// Replace namespace values if provided
 					if ( $new_slug ) {
-						$contents = Theme_Utils::replace_namespace( $contents, $new_slug, $new_name );
+						$contents = Theme_Utils::replace_namespace( $contents, $old_slug, $new_slug, $old_name, $new_name );
 					}
 
 					// Add current file to archive
diff --git a/includes/class-create-block-theme-api.php b/includes/class-create-block-theme-api.php
index 361281a5..1868a194 100644
--- a/includes/class-create-block-theme-api.php
+++ b/includes/class-create-block-theme-api.php
@@ -462,7 +462,7 @@ private function sanitize_theme_data( $theme ) {
 		$sanitized_theme['subfolder']           = sanitize_text_field( $theme['subfolder'] );
 		$sanitized_theme['recommended_plugins'] = sanitize_textarea_field( $theme['recommended_plugins'] );
 		$sanitized_theme['template']            = '';
-		$sanitized_theme['slug']                = sanitize_title( $theme['name'] );
+		$sanitized_theme['slug']                = Theme_Utils::get_theme_slug( $theme['name'] );
 		$sanitized_theme['text_domain']         = $sanitized_theme['slug'];
 		return $sanitized_theme;
 	}
diff --git a/tests/test-theme-utils.php b/tests/test-theme-utils.php
new file mode 100644
index 00000000..6a7ec214
--- /dev/null
+++ b/tests/test-theme-utils.php
@@ -0,0 +1,66 @@
+<?php
+/**
+ * @package Create_Block_Theme
+ */
+class Test_Create_Block_Theme_Utils extends WP_UnitTestCase {
+
+	public function test_replace_namespace_in_pattern() {
+		$pattern_string = '<?php
+/**
+ * Title: index
+ * Slug: old-slug/index
+ * Categories: hidden
+ * Inserter: no
+ */
+?>
+<!-- wp:template-part {"slug":"header-minimal","tagName":"header"} /-->
+';
+
+		$updated_pattern_string = Theme_Utils::replace_namespace( $pattern_string, 'old-slug', 'new-slug', 'Old Name', 'New Name' );
+		$this->assertStringContainsString( 'Slug: new-slug/index', $updated_pattern_string );
+		$this->assertStringNotContainsString( 'old-slug', $updated_pattern_string );
+
+	}
+
+	public function test_replace_namespace_in_code() {
+		$code_string = "<?php
+/**
+ * old-slug functions and definitions
+ *
+ * @package old-slug
+ * @since old-slug 1.0
+ */
+
+if ( ! function_exists( 'old_slug_support' ) ) :
+
+	function old_slug_support() {
+";
+
+		$updated_code_string = Theme_Utils::replace_namespace( $code_string, 'old-slug', 'new-slug', 'Old Name', 'New Name' );
+		$this->assertStringContainsString( '@package new-slug', $updated_code_string );
+		$this->assertStringNotContainsString( 'old-slug', $updated_code_string );
+		$this->assertStringContainsString( 'function new_slug_support', $updated_code_string );
+		$this->assertStringContainsString( "function_exists( 'new_slug_support' )", $updated_code_string );
+	}
+
+	public function test_replace_namespace_in_code_with_single_word_slug() {
+		$code_string = "<?php
+/**
+ * oldslug functions and definitions
+ *
+ * @package oldslug
+ * @since oldslug 1.0
+ */
+
+if ( ! function_exists( 'oldslug_support' ) ) :
+
+	function oldslug_support() {
+";
+
+		$updated_code_string = Theme_Utils::replace_namespace( $code_string, 'oldslug', Theme_Utils::get_theme_slug( 'New Slug' ), 'OldSlug', 'New Slug' );
+		$this->assertStringContainsString( '@package newslug', $updated_code_string );
+		$this->assertStringNotContainsString( 'old-slug', $updated_code_string );
+		$this->assertStringContainsString( 'function newslug_support', $updated_code_string );
+		$this->assertStringContainsString( "function_exists( 'newslug_support' )", $updated_code_string );
+	}
+}